easy · FRM Part 2 Operational Risk
An operational resilience framework sets an 'Impact Tolerance' for payments.
How does a KRI support this tolerance?
- The KRI acts mainly as a lagging count of how many times the tolerance has already been formally breached in the past.
- The KRI is used instead to calculate the annual insurance premium the firm pays under its cyber and payments-outage coverage policy each year.
- The KRI replaces the impact tolerance entirely, so the firm no longer needs to define one in its regulatory report to supervisors.
- The KRI monitors leading triggers (e.g., system latency) that suggest the firm is approaching its maximum tolerable disruption level.
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